Africa’s richest man and president of Dangote Group, Aliko Dangote, has again drawn attention to a major problem in Nigeria’s economy: it is sometimes cheaper to export goods made in the country than to sell them locally. Using cement as a clear example, Dangote explained that heavy taxes, multiple levies, and regulatory charges are the main reasons Nigerians pay more for cement produced within their own borders.
Speaking during a press briefing with journalists over the weekend, Dangote openly explained why cement produced by his company is sold at a lower price outside Nigeria than within the country. According to him, the difference has little to do with production cost or profit margins and much more to do with Nigeria’s tax and regulatory system.
Dangote said export operations allow manufacturers to avoid several taxes that apply to goods sold locally. These taxes, he noted, significantly raise the cost of cement sold in Nigeria. By contrast, exported cement is free from many of these charges, making it cheaper and more competitive in foreign markets.
He broke down the issue in simple terms. According to him, when cement is sold in Nigeria, the producer must pay company income tax, education tax, health-related levies, value-added tax (VAT), and withholding tax, among others. Altogether, these charges add a heavy burden to the final price paid by Nigerian consumers.
“In export, I’m saving a lot of money,” Dangote explained. “I’m not paying 30 per cent income tax. I’m not paying education tax. I’m not paying health tax. I’m not paying VAT. I’m not paying withholding tax.”
By avoiding these costs, he said, Nigerian cement can compete favourably with products from countries like Turkey, Russia, and China in the international market. Ironically, the same cement becomes more expensive once it is sold within Nigeria because of government charges.
This situation highlights a deeper issue in Nigeria’s economic structure. Ideally, local production should make goods cheaper for local consumers. However, Nigeria’s fiscal system often produces the opposite result. Manufacturers find it easier and cheaper to export goods than to sell them at home, even though the products are made locally.
For years, government officials have encouraged local manufacturing as a solution to high prices, unemployment, and foreign exchange pressure. Cement is often used as a success story, as Nigeria moved from heavy import dependence to self-sufficiency within two decades. Yet, despite local production, cement prices remain high, frustrating builders, contractors, and ordinary Nigerians trying to build homes.
Dangote’s comments help explain why. The cost of doing business in Nigeria is high. Beyond taxes, manufacturers face challenges such as poor power supply, bad roads, port delays, multiple regulators, and frequent policy changes. Many companies generate their own electricity, repair access roads, and fund security around their facilities. These costs are eventually passed on to consumers.
While Dangote focused on taxes during his remarks, the issue goes beyond taxation alone. Nigeria’s regulatory environment is complex, with many agencies imposing fees, permits, and compliance costs. Even when each charge seems small, the combined effect is significant.
The result is that Nigerian consumers end up paying more for locally made goods, while foreign buyers enjoy lower prices. This reality contradicts the goal of promoting domestic manufacturing to reduce living costs.
Economic analysts say the problem is not unique to cement. Similar patterns exist in other sectors such as food processing, beverages, and manufactured goods. Export incentives, tax waivers, and duty exemptions are designed to encourage foreign exchange earnings, but they sometimes create an unfair situation where local buyers subsidise exports through higher prices.
For ordinary Nigerians, the impact is direct. Cement is a key input for housing, roads, schools, hospitals, and other infrastructure. High cement prices increase the cost of construction, slow down development projects, and make home ownership more difficult. In a country with a large housing deficit, this is a serious concern.
Dangote’s statement also raises questions about government policy priorities. If Nigeria wants to truly support local industries and reduce prices for consumers, many believe there is a need to review the tax system. Simplifying taxes, reducing duplication, and improving efficiency could lower production costs without reducing government revenue in the long run.
Some experts argue that a broader tax base, rather than heavy taxation on a few formal businesses, would be more effective. Nigeria’s tax-to-GDP ratio remains low compared to many countries, partly because a large portion of the economy operates informally. As a result, registered companies carry a disproportionate share of the tax burden.
There is also the issue of trust. Many businesses complain that taxes are not matched by visible public services. When companies pay multiple taxes but still provide their own power, water, roads, and security, the cost of production rises sharply. Consumers then pay the price.
Dangote’s remarks come at a time when Nigeria is grappling with inflation, currency pressure, and rising living costs. Cement prices have risen in recent years, adding to the challenges faced by builders and developers. Government officials have held meetings with cement producers in the past, urging them to reduce prices, but such appeals often fail to address the underlying cost structure.
The businessman’s explanation suggests that price controls or public pressure alone cannot solve the problem. Without addressing taxes, levies, and regulatory inefficiencies, manufacturers have little room to cut prices sustainably.
Beyond cement, the situation reflects a wider economic challenge. When a country’s policies make it cheaper to sell goods abroad than at home, local consumers suffer, and domestic demand weakens. Over time, this can limit economic growth and industrial expansion.
Dangote’s comments have reignited debate about Nigeria’s business environment and the need for reforms. Supporters say his openness provides rare insight into how policies affect real production costs. Critics, however, argue that large companies also benefit from government incentives and should play a role in easing prices.
Regardless of differing views, the issue he raised is clear: Nigeria’s tax and regulatory system plays a major role in the prices citizens pay for basic goods. Until these structural issues are addressed, locally made products may continue to cost more at home than abroad.
As Nigeria seeks to build a stronger, more inclusive economy, policymakers face a difficult balance. They must raise revenue to fund public services while also creating a business environment that supports production, lowers prices, and improves living standards. Dangote’s remarks serve as a reminder that getting this balance wrong can have real consequences for everyday Nigerians.